March 31: The red flags had started popping up with alarming regularity.

IVRCL, the Rs 3,800-crore Hyderabad-based infrastructure firm, has been blacklisted by several state governments for reneging on contract obligations and was pulled back from the brink of bankruptcy by a bank-funded bailout in June 2014.

The rot really set in by August 2009 when the Greater Hyderabad Municipal Corporation ordered an investigation after a 20-foot trench caved in, killing two workers at a sewerage pipeline project.

The civic body recommended to the Andhra Pradesh government - which ruled before the state was hewn - that the firm be blacklisted, and it was accepted.

There was more trouble soon after. In 2010, the Jharkhand state electricity board demanded a CBI probe into an advance payout of Rs 391.7 crore for a rural electrification project that ran into a gridlock. The payout was more than 90 per cent of the Rs 410-crore project cost.

The following year, the Uttar Pradesh Jal Nigam blacklisted the loss-laden IVRCL for slipping badly on schedules relating to pipeline projects in 33 towns in the state.

The infrastructure firm, built by Eragam Sudhir Reddy in November 1987, ran into trouble with central government agencies as well. In 2013, the Rail Vikas Nigam, an arm of the Indian Railways, terminated four major contracts with IVRCL because of serious lapses.

Earlier, in 2010, the Indian Navy was involved in a bitter battle with IVRCL and Maytas Infra, a sister concern of the scandal-scarred Satyam Computer Services, for "gross lack of commitment" in building the Indian Naval Academy (Navac) at Ezhimala, north Kerala.

Matters boiled over in February this year when Jharkhand development minister C.P. Singh announced in the Assembly that the government had decided to blacklist IVRCL and encash bank guarantees worth Rs 132 crore because of its poor performance on a rural electrification project in eight districts. The state government has formed a committee to work out ways of recovering dues of Rs 258 crore from the firm.

Eragam Sudhir Reddy had stumbled into the world of business almost by accident. A graduate from Nizam College in Hyderabad, he was supposed to follow in the footsteps of his lawyer dad. But fate decreed otherwise.

After running a few odd jobs at a construction business in Odisha that was owned by a friend of his father, he discovered that he really had a knack for the construction business and chose to go it alone.

The first contract was a Rs 42-lakh contract from Central Railway: true to form, he slipped up badly and almost went bankrupt.

Since then, with the help of political benefactors, he built up his infrastructure business and won contracts across the country.

The company was floundering in a financial mess by 2014, prompting it to seek a big bailout from the lenders under a strategic debt-restructuring programme. The banks first agreed to convert their debts into shares in the company and then went on to accept a haircut on their loans. The company had lurched its way out of a crisis.

Saddled with a loss of Rs 1,568 crore in the year ended March 2015, the lenders are now scouting for a new buyer for the star-crossed firm.

On February 23, the lenders agreed to take a controlling 51 per cent stake in the company after converting a part of the Rs 7,500-crore debt on its books.

Reddy, who has been running the company with a stake of just 7.64 per cent, announced in Hyderabad that IVRCL would opt out of the roads and infrastructure business and would focus only on water-related projects.

The company intends to divest all its build, operate and transfer (BOT) assets, comprising seven road projects and a desalination plant near Chennai.

IVRCL has issued a statement saying it "grieves the loss of precious lives and injuries to people and will cooperate with the authorities in investigating this accident".

"Such an incident has occurred for the first time in the company's history.... All necessary process and quality steps have been taken as per standard operating procedure and after obtaining all clearances," the statement says.

"Details are awaited to investigate the cause of the accident and IVRCL will do its utmost to find the causes."